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Economy in Brief

U.S. Trade Deficit Deepens to New Record in September
by Tom Moeller  November 4, 2021

• Exports fall sharply due to broad-based declines.

• Petroleum imports surge with higher prices.

• Deficit with China deepens to five-month low.

The U.S. trade deficit in goods and services increased to $80.93 billion during September from $72.81 billion in August, revised from $73.25 billion. The latest deficit was a record for the series which extends back to January 1992. A deficit of $80.3 billion was expected in the Action Economics Forecast Survey. Exports declined 3.0% in September (+16.6% y/y) following a 0.6% August gain while September imports rose 0.6% (19.9% y/y) after increasing 1.3% in August.

The trade deficit in goods deepened to $98.2 billion in September from $80.2 billion in August, revised from $89.41 billion. It compared to a $96.25 billion deficit in the advance report issued last week. Exports of goods fell 4.7% (+16.8% y/y) after a 0.8% August rise. Holding back the export total, industrial supplies & materials exports fell 9.9% (31.3% y/y) following a 6.7% rise. Capital goods exports declined 3.6% (+12.3% y/y) after falling 1.9% in August. Auto exports fell 2.0% (-11.7% y/y) following an 8.0% drop. Food exports were off 1.2% (-3.6% y/y), the third decline in four months. Increasing were nonauto consumer goods exports which strengthened 3.7% (30.5% y/y) in September after rising sharply in four of the prior five months.

Imports of goods rose 0.9% in September (18.4% y/y), about the same as in August. Capital goods imports increased 4.0% (18.7% y/y) after falling in three of the prior four months. Industrial supplies & materials imports rose 1.7% (56.5% y/y) after increasing 3.1% in August. To the downside, foods, feeds & beverage imports slipped 0.4% (+16.7% y/y), the third consecutive monthly decline. Nonauto consumer goods imports eased 0.1% (+12.4% y/y), the third decline in four months. Auto imports dropped 7.7% (-16.6% y/y), and they've fallen 21.8% since December of last year.

Petroleum imports rose 4.3% in September and have roughly doubled y/y. The  monthly rise occurred despite a decline in the price of crude oil to an average $64.43 per barrel from $65.06 in August. The price was substantially higher than $37.60 per barrel one year earlier. Nonpetroleum imports rose 0.6% (14.3% y/y) after rising 1.0% in August.

The real (adjusted for price changes) trade deficit in goods deepened to $111.0 billion (chained 2012 dollars) in September from $101.5 billion in August. Real exports of goods fell 4.9% (+0.8% y/y) after a 0.5% rise. Real imports of goods increased 1.0% (9.9% y/y), the same as in August.

The surplus of trade in services rose to $17.2 billion in September after declining to $16.4 in August. The surplus was down from a high of $26.7 billion in January 2018. The value of services exports rose 0.9% (15.6% y/y) as travel exports rose 4.2% (63.2% y/y), the first increase in three months. Service imports eased 0.4% (+28.3% y/y) including a 4.0% rise (328.4% y/y) in travel imports.

The trade deficit with China deepened to a seasonally adjusted $31.5 billion, the largest deficit since April. Exports fell 1.6% (-6.2% y/y) while imports rose 8.2% (13.7% y/y). The trade deficit with Japan lessened to $5.0 billion as exports fell 3.4% (+23.4% y/y) and imports declined 6.5% (+5.4% y/y). The deficit with the European Union eased to $18.7 billion from $19.3 billion. Exports fell 0.9% (+19.0% y/y) and imports decreased 1.8% (+15.1% y/y).

The international trade data, including relevant data on oil prices, can be found in Haver's USECON database. Detailed figures on international trade are available in the USINT database. The expectations figures are from the Action Economics Forecast Survey in AS1REPNA.

Foreign Trade in Goods & Services (Current $) Sep Aug Jul Sep '20 2020 2019 2018
U.S. Trade Deficit ($ bil.) 80.93 72.81 70.30 62.63 676.69 576.34 580.95
Y/Y%
Exports of Goods & Services (% Chg) -3.0 0.6 1.2 16.6 -15.6 -0.4 6.2
Imports of Goods & Services (% Chg) 0.6 1.3 -0.1 19.9 -9.5 -0.5 7.4
  Petroleum (% Chg) 4.3 0.9 3.7 104.5 -39.7 -14.0 20.8
  Nonpetroleum Goods (% Chg) 0.6 1.0 -1.4 14.3 -3.5 -0.5 7.3
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